Get in touch with the guys at http://www.camperbug.co.uk" onclick="window.open(this.href);return false; I think they sort out a lot of the insurance for you. (Not sure as we don't do it)
As for hiring out for proms and weddings etc, make sure you've got the right insurance. We do weddings and have specific wedding cover. We looked into proms as we get about 4 enquiries a week(!!!!) but to do it legally, you need even higher insurance levels as well as (I think) a private hire and taxi licence. I know some people skirt around this but I always figure, if you're going to do it, do it right.
Thejinx is also spot on with one of the biggest issues - reliability. We've had to step in at the last minute to cover other wedding companies whose vans haven't been able to get to a wedding. Very stressful! We've been ok so far but that's because a large part of the hire costs go towards maintenance that is above and beyond what she really needs - just in case.